Title: Effect of corporate governance on income persistence and value relevance of quoted Nigerian firms

Authors: Cosmas Ikechukwu Asogwa; Grace Nyereugwu Ofoegbu; Uche Modum

Addresses: Department of Accountancy, University of Nigeria, Nigeria ' Department of Accountancy, University of Nigeria, Nigeria ' Department of Accountancy, University of Nigeria, Nigeria

Abstract: This paper examined the effect of corporate governance structures on earnings persistence and value relevance of Nigerian firms. Analysis was made using multivariate and multiple regression analytic tools with sample of 148 audited financial statements of quoted Nigerian firms in Nigerian Stock Exchange between 2014 and 2017. We found that CEO duality positively but insignificantly affected income persistence and positively and significantly affected value relevance. Board size significantly and negatively affected earnings value relevance while it negatively and significantly affected earnings persistence. Audit committee had a significant positive effect on earnings value relevance and accrual persistence. Thus, audit committee plays a vital constraining role while board expansion does not necessarily increase earnings quality. Overall, we can infer that the analyses involving all key earnings quality proxies could yield a better conclusion. Investors should rely largely on models that examined various impacts on earnings quality proxies.

Keywords: corporate governance; earnings persistence; earnings predictability; value relevance; CEO duality; audit committee; board size.

DOI: 10.1504/AJAAF.2020.109206

African Journal of Accounting, Auditing and Finance, 2020 Vol.7 No.1, pp.42 - 65

Received: 13 Dec 2018
Accepted: 12 Oct 2019
Published online: 01 Sep 2020 *